First reactions to Warner Bros-Paramount deal: “Mega-mergers raise red flags”, “An antitrust disaster”

The first UK, European and international reactions are coming in following last night’s (February 27) news Netflix has exited the bidding process for Warner Bros Discovery’s studio and streaming assets, paving the way for Paramount Skydance to acquire the entire company.

Industry organisations

”While we watched the developments overnight with interest, and the decision of Netflix seemingly to drop out of the competition to acquire Warner Bros Discovery simplifies matters a little, this does nothing to reduce our basic concerns, which are around the potential loss of a major US studio and its implications for the theatrical film slate,” said Phil Clapp, chief executive of the UK Cinema Association (UKCA).

“While we take the public statements from Paramount Skydance about its plans for any merged company in good faith — as we did those from Netflix — we remain determined to ensure that any deal is subject to rigorous scrutiny by the relevant competition authorities, in the UK this being the Competition and Markets Authority. That is the only way to ensure that legally-binding undertakings are put in place around distribution, marketing and theatrical exclusivity.”

Similarly, the concerns raised by Writers’ Guild of Great Britain when a Netflix deal was looking likely have not been suddenly appeased. “Mega-mergers like this raise red flags about competition, content and the implications for creators working in an increasingly global marketplace, at a time of industry contraction,” said the guild’s general secretary Ellie Peers. 

“Our members in TV and film will have understandable concerns and we will be watching the next steps of this deal closely, as it rightly faces regulatory scrutiny.”

Grace Carley, chief executive of UK sales agent trade body Film Export UK, noted: “Prolonged negotiations and the next stage of anti-competition investigations are a distraction to the business of making and distributing films and add to the general global uncertainty affecting the creative industries.”

“Whoever takes over Warner Bros, continuing consolidation within the creative industries is worrying for anyone who values competition and a plurality of voices and stories in entertainment and the media,” said Philippa Childs, head of UK creative industries’ union Bectu. 

“I am concerned that the takeover will have a negative impact on jobs and add to uncertainty in what is already an incredibly precarious sector to work in. We also need to be increasingly vigilant to prevent further homogenisation of content and the loss of any more of the UK’s unique and distinctive output.

“Such developments highlight the importance of the BBC, which continues to provide a unique UK voice as well as playing a fundamental role in our cultural ecosystem. With the BBC charter currently under review, now is a critical opportunity to protect the independence of the creative sector.”

Laura Houlgatte, CEO of the International Union of Cinemas (UNIC), said: UNIC has been following the latest developments with interest. However, our concerns remain, and we will continue to engage as discussions progress, stressing the importance of maintaining a strong and diverse theatrical slate, meaningful exclusivity periods, and appropriate marketing support.

“Our priority is to protect the long-term health of our members and ensure that robust safeguards are in place so that European cinemas can continue to thrive. This can only be achieved if any agreement is subject to the highest level of scrutiny by the relevant competition authorities, with legally binding commitments.”

Regulators

M&A expert Kim Chua, a partner at OC&C Strategy Consultants, said  in Europe the deal would “face detailed competition scrutiny, particularly around the combined group’s bargaining power over cinemas, broadcasters and streaming rivals.”

She said: “In Europe, a Paramount acquisition of Warner Bros Discovery would face detailed competition scrutiny, particularly around the combined group’s bargaining power over cinemas, broadcasters and streaming rivals.

“It would almost certainly go to an in-depth review in Brussels, but the streaming overlap is less acute than in a hypothetical Netflix–Warner deal, because neither Paramount+ nor Max is the market leader in most European countries and arguably the combination provides a stronger counterweight to Netflix, the clear leader in streaming.

From the UK side, “the focus would likewise be on competition rather than media plurality, since WBD doesn’t add a major domestic news asset to Paramount’s Channel 5 business,” Chua explained.

“Foreign-investment screening could run in parallel if sovereign wealth funding is involved, but that is typically about governance safeguards rather than blocking the deal outright. Overall, although there is much detailed work to do, and potentially some remedies to put in place, I would expect that clearance in Europe and the UK is more likely than not, albeit after a lengthy review.”

US politics

The first reactions from US politicians saw concerns raised over whether the deal would break antitrust laws and the Ellison family’s ties to the Trump Administration.

California’s attorney general Rob Bonta said: “Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

California’s Democratic senator Adam Schiff added: “What was true for Netflix is still true now for Paramount. The merger of two of Hollywood’s biggest studios must be subject to the highest levels of scrutiny, free from White House political influence, to determine its impact on American jobs, freedom of speech, and the future of one of our nation’s greatest exports.”

Democratic senator Elizabeth Warren was especially critical of the new deal: “A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families. What did Trump officials tell the Netflix CEO today at the White House?

“A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want. With the cloud of corruption looming over Trump’s Department of Justice, it’ll be up to the American people to speak up and state attorneys general to enforce the law.”

• Netflix signals end of WB pursuit, WBD head David Zaslav “excited” about Paramount merger